Posts Tagged ‘Sir Christopher Kelly’

Nick Clegg? Yes, Nick Clegg. Yesterday Ed Miliband gave a landmark speech about Labour’s relationship with the union movement, but it is Nick Clegg who will determine whether this boldest of gambles pays off for Labour’s leader.

To understand why a call to Clegg is so important, we need to be clear on the purpose of yesterday’s speech.

For all the talk of democracy and the new politics, this was only ever about dealing with the fall-out from Falkirk. David Cameron’s recent barrage at PMQs defined the immediacy of Ed Miliband’s task: to demonstrate Labour is not in the pockets of the unions and can govern in the interests of the whole country.

Yesterday’s address was a visionary response that has the potential to transform what has been an unmitigated disaster, into defining moment for Ed Miliband.

But now comes’ the hard work. Turning aspiration into reality will be difficult and the path to success is both narrow and parlous.

Based on the details we have about the proposals, we know the arrangements for the political levy will remain the same.

Trade unionists will still contribute to their union’s political fund, unless they expressly opt out. Just as they do now.

What will change is how the political fund is distributed by the unions.

Under Ed Miliband’s plan, trade unionists will now have to “opt-in” to pay a portion of their political levy to the Labour party as an affiliation fee.

At the moment, the union leadership decide the number of members it will affiliate (for example, the GMB affiliates 400,000 of its 600,000 members) and the fees are paid in bulk, by the union, to the party.

The likelihood is that no matter how successful Labour is at encouraging union members to contribute to the party, there will be a major shortfall in affiliation fees.

Unions have estimated a potential 90% drop in affiliations. This isn’t even a particularly pessimistic assessment. Let’s not forget, the majority of trade unionists didn’t even vote Labour at the last election, let alone want to fund the party.

As the level of affiliations fall, so the portion of the union’s political fund that can be used for discretionary donations increases. The overall total in the political fund remains the same; it’s the split between affiliation fees and donations that will change.

In a scenario, where affiliation fees drop significantly, union leaders could end up with greater powers of patronage from the increased sums available for donation.

The cringe inducing video of Peter Cruddas promising supper with Sam and David with comic buffoonery was still leading the news. The nod and a wink about the promise of policy input into (something called) the number ten policy committee of course took this to another level. At a stroke it went from being just another “cash for access story” to “cash for policy” – the real daddy of political sleaze. Having said that, I was actually still quite optimistic on Sunday, maybe this time there would be a political deal; maybe this time our politicians will sort it out; maybe this time there would be legislation fundamentally reforming the funding of political parties?

But by Monday evening the optimism was dashed. Once again the ugly head of tribal politics intervened. Ed Miliband and Francis Maude stood at the respective dispatch boxes and shouted at each other. It was horrifically depressing. Neither of them in my view did politics any favours, despite the supportive bellowing from their respective benches behind them. The public, to the extent that they were watching, must have thought, “WTF was that” because it certainly wasn’t edifying.

None of the parties has much to boast about here. Each has their list of scandals involving party and MP finances. It is all too easy to get dragged in, as I very well know. Some scandals involve people trying to personally gain while some involve mistakes, or are the result of playing within the rules but not within the spirit of them. All though, involve a further nail in the coffin of the reputation of politics, as a sceptical public do not draw any distinction as to the motives. I know that I certainly regret my part in the succession of stories that have damaged politics.

Now if someone decides to feather their own nest and act corruptly there is probably not much that we can do about it, but there is something that we can do to reduce the risk of other funding scandals. Because the harsh truth is that the current system encourages the parties to push at the boundaries of the legislation passed ostensibly to clean up politics. Just as people perfectly reasonably employ accountants to help them avoid tax, so political parties employ people to maximise the income that they can receive. After all, why should they turn a gift horse away? So loop holes are found and exploited. Legal? Yes. Acceptable? Certainly not to the public.

An Uncut analysis of donations to the Labour party since Ed Miliband became leader reveals that the biggest single donor is the House of Commons, giving £9.6m. This so called “short money” is a stipend paid to the opposition to balance the advantage a government gains from the enormous resources of the civil service.

Roll in the funding the opposition receives from the House of Lords, the Scottish Parliament and grants from the Electoral Commission for policy development and Labour has banked almost £11.3m from public funding sources since October 2010. That’s more than the combined donations to the central party (as opposed to individual constituency parties) from the all of the unions.

This isn’t a recent a development either. A decade ago, when the Tories were at their nadir, what was their biggest source of funding? Was it Lord Ashcroft? Or a.n.other city gent, eager to run down his bank balance?

Of course not. In 2002 the total donations from individuals to the Tories came to £2.3m. In comparison the amount the Tories drew from public funds was nearly double at £4m.

These figures expose one of the myths in the political debate on funding – that the public will not accept state funding of politics.

This post by Peter Watt was originally published on 24th November 2011. David Cameron could have done with reading it back then, might have saved himself a spot of bother. But at Uncut we believe in giving people second chances, so here it is again.

I feel strongly about this issue. I was caught up in “cash for honours”. I had to instigate swingeing budget cuts and redundancies to avoid bankruptcy at the Labour party. I was part of Labour’s negotiating team in the failed Haydn Philips inter-party talks on party funding in 2006 and I was embroiled in a pretty major funding scandal that lead to my resignation as general secretary and another police investigation. I also gave evidence to the Kelly enquiry.

So let’s start with some cold hard facts.

Politics is expensive. Staff that run campaigns, develop policy and arrange conferences, plan strategy, engage the public and design materials, websites and videos cost money. And there’s everything a reasonable sized organisations needs: advertising, membership systems, property, cars, travel, hotels, publications, professional services like accountants and lawyers, furniture, computers, software licenses, insurance and stationery. This does not come cheap and it all needs to be paid for.

Politicians are generally shallow and fear failure. This means that they don’t care all that much about where the money comes from to pay for those things that they think that they need to maximise their chances of winning. They will dress it up as wanting to win to do good things, and there is obviously some truth in that. But fundamentally they want the glory; and they need funds to achieve it.

Politicians do not get involved in fundraising. They, rightly, fear being tainted by the “dirty” business of fundraising. So while they demand that the funds are there when they need them, they generally don’t lift a finger to raise it unless absolutely forced. The result is that those charged with raising funds are put under enormous pressure and are given very little support to raise the necessary cash.(more…)

As Labour’s newly elected NEC prepares to settle in for the new year, it appears that one of the issues they will be considering carefully is that of primaries for selections. Primaries are loved by some and hated by others and, perhaps, the controversy over them was why refounding Labour was relatively passive on the subject or, at least, kicked it into the long grass.

Renewed interest in primaries follows the French socialist party’s recent use of a primary system to select their presidential candidates. Here at party HQ, interest in the French experiment seems to lie less with a desire to expand democracy, and more with of a sense that primaries are an opportunity to pull in some quick cash.

The business case following the French primaries is simple. To vote in the French Socialist’s primary voters had to pay a €1 fee. 2,860,157 people voted in the second round which, of course, equates to a lot of dosh — just short of £2.5 million pounds. (more…)